NZDUSD Technical Analysis – The bearish bias remains intact

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-interest-rate-decision-25-bps-rate-hike-to-525-550-20230726/">hiked by 25 bps</a> as
expected and kept everything unchanged at the last meeting.</li><li>Fed Chair Powell reaffirmed their data dependency
and kept all the options on the table.</li><li><a href="https://www.forexlive.com/news/us-june-cpi-02-mm-versus-02-mm-expected-20230810/">Inflation</a> measures
since then showed further disinflation. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a>
displayed signs of softening although it remains fairly tight.</li><li>Overall, the economic data started to surprise to
the downside lately.</li><li>The Fed members are leaning more towards a pause
rather than another rate hike.</li><li>The market doesn’t expect the Fed to hike anymore.</li></ul><p>New Zealand:</p><ul><li>The <a href="https://www.forexlive.com/centralbank/reserve-bank-of-new-zealand-leave-cash-rate-unchanged-at-55-as-widely-expected-20230816/">RBNZ</a> kept its official cash rate unchanged at the
last meeting while stating that it will remain at the restrictive level for the
foreseeable future to ensure that inflation comes down back to target. </li><li>The recent <a href="https://www.forexlive.com/news/new-zealand-q2-cpi-11-qq-vs-expected-10-20230718/">New Zealand inflation</a> and <a href="https://www.forexlive.com/news/new-zealand-unemployment-rate-36-vs-expected-35-20230801/">employment</a> data surprised to the upside but
the PMIs are in contraction with the <a href="https://www.forexlive.com/news/new-zealand-services-pmi-for-july-plunges-into-contraction-to-478-prior-501-20230813/">Services PMI</a> recently plunging into contraction.
</li><li>The wage growth has also missed
expectations and it’s something that the central banks are watching closely for
second round effects. </li><li>The New Zealand <a href="https://www.forexlive.com/news/new-zealand-q2-retail-sales-10-qq-expected-26-20230822/">Retail Sales</a> beat expectations although remains
deeply negative.</li><li>The RBNZ is expected to keep the
cash rate steady at the next meeting.</li></ul><p>NZDUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that NZDUSD pulled
back into the 0.5987 <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support turned resistance</a>, where
we had also the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>, and
sold off following the NFP report. The miss in the Chinese Services PMI today
increased the bearish momentum and the pair broke the previous low. </p><p>NZDUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we’ve been <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> for a
long time and this is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we got a pullback into the 0.5987 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> where
the sellers piled in for another bearish move. We should see the sellers coming
into the market at every pullback now. </p><p>NZDUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
price broke below the previous low but the price is overextended as depicted by
the distance from the blue 8 moving average. In such instances, we can
generally see a pullback into the moving average or some consolidation before
the next move. The sellers should lean on the black <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> where
they will also have the confluence with the 21 moving average. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is a bit empty on the data front with just the
US ISM Services PMI tomorrow and the US Jobless Claims on Thursday being the
main highlights. The market pricing is unlikely to change unless the data comes
in really hot in which case, we should see the US Dollar strengthening. On the
other hand, weaker readings might just bring forward rate cuts expectations and
weigh on the greenback in the short term. </p>

This article was written by FL Contributors at www.forexlive.com.